EconomyEditor's PickNewsSouth African Airways’ subsidiary suspends services to parent over non-payment

1 year ago126 min
imageStock Markets1 hour ago (Sep 26, 2020 08:40AM ET)

(C) Reuters. FILE PHOTO: South African Airways (SAA) plane taxis after landing at O.R. Tambo International Airport in Johannesburg

JOHANNESBURG (Reuters) – South African Airways’ maintenance subsidiary has withdrawn its services to its parent after the struggling airline failed to pay money it owes, SAA spokesman Tlali Tlali told local news channel eNCA on Saturday.

Administrators took control of SAA in December after almost a decade of financial losses, and have been trying to keep it afloat as the coronavirus pandemic compounds its problems.

Tlali said SAA Technical, a subsidiary of SAA that provides critical maintenance services including inspections required before a flight can take off, said in a letter it had taken the decision after the national carrier did not pay for services rendered.

“SAA Technical… as a company registered on its own is pursuing its commercial interests,” Tlali said, adding meetings would take place over the weekend to try and resolve the issue.

He added that while SAA was not operating commercial flights, it has been doing repatriation flights for South Africans that have been stuck overseas due to the coronavirus pandemic as well as some charter flights that could be interrupted if SAA Technical does not restore its services.

Another SAA subsidiary, Mango, is currently operating domestic commercial flights, which eNCA said would be grounded from midnight on Saturday due to SAA Technical’s decision.

Mango could not immediately be reached for comment.

SAA’s administrators published a rescue plan in June that requires more than 10 billion rand ($584.16 million) to work. The Department of Public Enterprises has said it is in the process of finalising funding and the airline would not be liquidated.

“As matters stand, we are waiting from the shareholder (government) to give us an indication as to when funds will be made available,” Tlali said, adding funding in the short-term was needed.

South African Airways’ subsidiary suspends services to parent over non-payment

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